Topic: Buying a house is a terrible financial decision, renting is smarter.
Anonymous A started this discussion 1 year ago#120,430
A 5.5% interest rate for a standard 30 year mortgage means you pay as much in interest on the house as you paid for the house itself.
+ Property taxes
+ Paying for your own appliances
+ Giving up the opportunity to move, forgoing higher wages - unless you want to pay tens of thousands of dollars in commissions and restart your mortgage which means you are back to paying interest on the loan instead of principal.
The cherry on top is that if your house "goes up in value" nominally, but in inflation-adjusted terms the value is flat, you are still taxed on capital gains when you sell. You just gained a tax liability even though in real terms you didn't make any money at all.
...For example: a 3% inflation rate, over 30 years, is a cumulative inflation rate of over 80%. If your house maintains a flat real value, your nominal house price goes up 80+%. The government considers that a gain, even though in real terms, it's not a gain at all.
...On a $500,000 home, that's a nominal gain of $400,000 in value, and a real gain of $0. The government will tax most at 15%. That's a tax liability of $60,000 for a real appreciation of ZERO DOLLARS! You're paying taxes for money you didn't really make.
Add it all up and homeowners will pay 3x the value of the sticker price over the course of the loan. Even when it's paid off, they still have property taxes and are on the hook for their own home maintenance costs, so you never really finish paying just like a renter.
Anonymous C joined in and replied with this 1 year ago, 31 minutes later, 2 hours after the original post[^][v]#1,318,417
My mortgage is 50% of the going rental rate in town, but I gotta say, dealing with everything that breaks is a major pain. I'm tempted to let it fall apart and sell it to flippers in 10 years (it'll save on the tax bill that way too).
Anonymous D joined in and replied with this 1 year ago, 14 hours later, 16 hours after the original post[^][v]#1,318,649
Real estate is a terrible investment, and that is exactly why so many successful people do it. In any scenario spending outside your means will never work. Imagine spending well below your means and working up from there.
Anonymous F joined in and replied with this 1 year ago, 1 hour later, 18 hours after the original post[^][v]#1,318,671
@1,318,649 (D)
It shouldn't be an investment, people should only buy land they intend to use. And the people should benefit from private citizens who desire to hold exclusive access to the commons. Implement the land value tax and you'll see affordable housing like never before.